Monday, December 17, 2012

Taxpayer Supported Wind Energy Should End

Congress is considering a renewal of the "Production Tax Credit" which is just one more enormous taxpayer funded boondoggle that cannot demonstrate any results.

Your help is needed: Contact Congressman Dave Camp, Chair of Ways and Means. Tell him to kill the PTC (Production Tax Credit). Note that if you do not live in his district, you will need to include your address in your email. Please do this today. A vote is expected this week!

Here is a comment from Sen. Lamar Alexander. He presents some good, hard data and rationale for why this tax credit should be allowed to die:
"Should Congress extend wind power's federal tax credit for six years at a cost of about $50 billion...?

The wind production tax credit was created in 1992. It gives wind developers a subsidy that is often equal to or below the wholesale cost of electricity in some markets. This "temporary" subsidy, already extended seven times, expires this month. Wind developers have urged Congress to extend the credit at decreasing levels over the next six years. The one-year extension passed out of the Senate Finance Committee costs $12.1 billion, according to the Joint Committee on Taxation. Some have estimated the industry's proposed six-year "phase out" would cost $50 billion--on top of $16 billion in federal wind subsidies from 2009 through 2013.

This subsidy should not be extended, first, because a government that borrows 42 cents of every dollar it spends can't afford it. Second, U.S. Energy Secretary Chu has testified that wind is a "mature" technology. Third, after 20 years and billions in subsidies, wind produces only 3 percent of our electricity. Fourth, such large subsidies distort the marketplace, making coal and nuclear uncompetitive. Replacing such baseload power with electricity that is produced only when the wind blows is the energy equivalent of going to war in sailboats when nuclear submarines are available. Finally, giant turbines and their power lines strung along scenic mountaintops destroy the environment in the name of saving the environment."
Read the full commentary here.

By contrast, Senator Charles Grassley made this video, telling you to support this waste of taxpayer money. Notice, he makes no credible argument that this tax handout has any merit, whatsoever.

Consider these facts:

Wind energy creates only 90 jobs for every 1,000 MWs generated; nuclear plants produce 500 jobs for every 1,000 MW of generating capacity.[1]
With 50,000 MW of wind already installed, this indicates only 4,500 permanent, longterm U.S. wind jobs.[2] And wind jobs are incredibly expensive:

·        In one glaring 2010 example, the government provided $1.2 billion in subsidies for a $1.9 billion project in Oregon, which created only 35 permanent jobs, costing taxpayers a whopping $30 million per permanent job![3]

·        In Texas, the 2010 Comprehensive Annual Report prepared by the comptroller’s office found that tax breaks awarded to 63 wind farms averaged almost $1.6 million per job.[4]

·        Extending the PTC for just one year is estimated to cost about $12 billion.[5]

·        The wind industry claims that ending the PTC will cause 37,000 job losses; Even accepting that exaggerated number, each of these purported wind jobs would cost American taxpayers an astronomical $325,000.00

·        Incredibly, a well-established industry with 50,000 MW of installed generation is asking the public to pay more than $325,000.00 per job, because wind can’t compete with other more cost effective, reliable domestic resources.

Contrary to the wind industry’s vastly inflated claim of 75,000 current wind-related jobs, the real wind related figure is less than 15,000, including positions in O&M, project  development and construction jobs, which will remain even after the PTC expires. The wind lobby’s own jobs data reveals this fact in reporting construction and “other” jobs.[6] After 20 years of PTC subsidies, the wind industry permanently employs only 0.01% of the 142 million employed Americans.[7] In stark contrast, in 2010, the shale gas industry supported nearly 150,000 direct jobs, growing to more than 360,000 direct jobs in 2035.[8]

Despite the $4.9 billion in federal subsidies that wind received in FY2010 alone, and record growth in generating capacity, the wind industry has created few employment opportunities overall. Even with the PTC and new wind farms, the wind industry lost 10,000 jobs between 2009 and 2010 and employment stagnated between 2010 and 2011.

Many wind employers have made headlines with layoffs and cash flow shortfalls.  Why? Because regardless of the PTC availability, wind is uneconomic and costly. Wind jobs – even with massive taxpayer handouts – are not sustainable given current market conditions, i.e., low demand and abundant, cheap, domestic natural gas.
The taxes funding subsidies saddle the economy with large costs, negatively affecting employment overall. Subsidizing uneconomic, unsustainable wind jobs eliminates better jobs elsewhere. For example, an independent economic analysis of a New Jersey wind project concluded it would reduce employment by almost 30,000 jobs because of higher electric costs, causing layoffs in other businesses.[9]

Your help is needed: Contact Congressman Dave Camp, Chair of Ways and Means. Tell him to kill the PTC (Production Tax Credit). Note that if you do not live in his district, you will need to include your address in your email. Please do this today. A vote is expected this week!

[1]Nuclear Energy Institute; Resources and Stats
[2] U.S. Energy Information Administration, Monthly Energy Review May 2012
[3] Institute for Energy Research: It’s not “green energy,” it’s corporate welfare masquerading under an environmental rainbow
[4] 2010 Texas Comprehensive Annual Financial Report
[5] Joint Committee on Taxation Estimate of Senate Finance Committee Tax Extenders Bill – Aug. 2, 2012.
[6] AWEA U.S. Wind Industry Annual Market Report Year Ending 2011;
[7] Bureau of Labor Statistics;
[8] HIS Global Insight, The Economic and Employment Contributions of Shale Gas in the U.S. December 2011
[9] David Dismukes, Assessment of the Net Economic Benefits of the Proposed Fisherman’s Atlantic City Wind farm. 

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